In view of analysts at Deutsche Bank, Brexit feels like its entering a crucial stretch and Friday was a bad day for the UK government with the weekend headlines not offering much additional joy.
Key Quotes
“Pro-remain Tory MP Jo Johnson resigned and suggested he wouldn’t support the deal in its current form. The arithmetic around any deal passing through Parliament was already challenging enough without losing pro-remain Conservatives.”
“The weekend media suggests there could be others refusing to vote in favour along those lines with the Sunday Times suggesting four such pro-remain Government resignations are possible. Basically the deal as it stands is being criticised by both remain and leave Conservatives and also by the DUP. Meanwhile the Labour Party opposition is highly unlikely to vote for it. So a deal being reached with the EU still seems the easy part of the equation.”
“The DB house view is that not enough risk is priced into sterling given the Parliamentary problems ahead.”
“Cabinet ministers have apparently been seeing the proposed text of the deal with the EU over the last few days (seemingly without the Irish section not yet availble) and if PM May can win their approval we could see a formal cabinet meeting early this week to formalise the deal before May makes a statement to the House of Commons.”
“The situation is extremely fluid however especially with the increased backlash internally within the government and with the Irish border issue still outstanding. So these dates could easily (and seem likely to us to) be pushed back. How we get out of this cul-de-sac is very unclear.”
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